A slight cooling in U.S. home prices did little to relieve pressure on homeowners in 2025, as property taxes climbed to nearly $400 billion and effective tax rates reached their highest level in five years, underscoring the growing disconnect between market values and local tax burdens.<\/p>\n
New figures from ATTOM show that local governments levied $396.8 billion in property taxes on approximately 89.6 million single-family homes, a 3.7% increase from the prior year. The average tax bill rose to $4,427, up 3% from 2024, even as home values declined modestly.<\/p>\n
The national effective property tax rate increased to 0.9%, compared with 0.86% a year earlier, marking the highest level since 2020. The rise reflects a shift in the underlying dynamics of the housing market, where tax burdens are increasing despite softening property values. The average estimated value of a single-family home fell 1.7% year over year to $494,231, though it remains near historically elevated levels following sharp gains in prior years.<\/p>\n
“Property taxes are no longer moving in tandem with home prices,” said ATTOM Chief Executive Officer Rob Barber, noting that higher tax bills combined with declining values are pushing effective rates upward and highlighting the growing influence of local government spending and policy decisions.<\/p>\n
The heaviest tax burdens remain concentrated in the Northeast and Midwest, where older infrastructure and higher municipal costs continue to drive elevated rates. Illinois led the nation with an effective rate of 1.84%, followed by New Jersey at 1.58% and Vermont at 1.4%. Connecticut and Ohio were close behind, while several other states across those regions also posted rates above 1.2%.<\/p>\n
These higher rates translate into significantly larger tax bills. Homeowners in New Jersey paid an average of $10,499 in 2025, nearly ten times the $1,081 average in West Virginia, which had the lowest tax burden in the country. Connecticut, New Hampshire, Massachusetts, and New York also ranked among the states with the highest average bills, each well above the national average.<\/p>\n
By contrast, the lowest effective tax rates were largely concentrated in the West and South. Hawaii posted the lowest rate at 0.33%, followed by Idaho, Wyoming, Arizona, and Alabama. Several other states, including Utah, Delaware, Tennessee, and Nevada, also maintained relatively low tax burdens, although in some cases those savings are offset by rising home prices and population growth.<\/p>\n
At the metropolitan level, disparities are even more pronounced. Smaller metro areas in the Northeast and Midwest recorded the highest effective tax rates, led by Binghamton, New York, at 2.27%, along with Champaign, Illinois, and Trenton, New Jersey. Meanwhile, some of the lowest rates were found in markets such as Knoxville, Tennessee, Salisbury, Maryland, and Honolulu, Hawaii.<\/p>\n
Among the largest metropolitan areas, those with populations exceeding one million, Rochester, New York, Chicago, and Buffalo posted the highest effective tax rates. In contrast, major Sun Belt markets including Phoenix, Nashville, Salt Lake City, and Las Vegas ranked among the lowest.<\/p>\n
More than half of the 221 metro areas analyzed experienced property tax increases that outpaced the national average. Some of the most significant jumps occurred in Memphis, where average tax bills surged 34%, followed by Baltimore at 27% and more moderate increases in St. Louis, Houston, and Kansas City. The trend suggests that local governments are increasingly relying on property taxes to offset fiscal pressures, even as housing markets begin to cool.<\/p>\n
At the county level, the highest property tax bills remain concentrated in affluent coastal regions. Of the 26 counties where average taxes exceed $10,000, a disproportionate share are located in New Jersey, California, and New York. Westchester County, New York, recorded the highest average bill at $18,386, followed by Marin County, California, and several counties in northern New Jersey, including Bergen and Essex, as well as San Mateo County in California.<\/p>\n
The data point to a broader structural shift in the U.S. housing landscape. Property taxes are becoming less tied to fluctuations in home prices and more reflective of local fiscal demands. For homeowners, that means carrying costs continue to rise even when property values stagnate or decline–a dynamic that could have lasting implications for affordability, migration patterns, and housing market stability.<\/p>\n\n